The drafting of two tribe-backed bills this year is sparked by Nevada launch and Cali Senator Rod Wright’s unpopular legislation
As details emerged yesterday of a new California online poker bill backed by eight tribes including the highly influential Pechanga, a key message was sent to the state’s tribes and politicians.
Whereas 12 months ago most of California’s tribes were divided over if and how online poker should be legalised in the state, this year there is impetus for these groups to work together to create their own language to suit the needs of the Native American community. Rather than criticise or suggest varying amendments to Senator Roderick Wright’s bill – which almost all were unanimously united against – two tribe-backed bills are now in circulation, with another influential Native American tribe, San Manuel, having drafted one already earlier this year.
Frustrated by Wright’s bill which would allow state racetracks to offer online poker and would have insisted tribes waive their sovereignty during the licensing process, the state’s tribes have instead decided to take matters into their own hands. And that could finally mean a breakthrough.
Michael Lombardi, chairman of the Gaming Commission of the Augustine Band of Cahuilla Indians, told eGaming Review the dissolution of the influential COPA consortium last year has also helped reduce the difference of opinion existing among the tribes, as well as concerns of a power shift to Nevada or federal government. The Pechanga-backed bill would rule out interstate compacts, something Nevada, with its limited population, is already pushing hard for.
“Senator Rod Wright’s legislation has galvanised opposition of all the tribes,” Lombardi said. “For most of them, if not all, the time has come for online poker in California. New Jersey and Nevada have taken their attention, and the last thing the tribes want is an interstate agreement with Nevada, or a federal bill giving all the power to Washington”.
With two tribe-backed draft bills circulating this year, legalised online poker in a state with a population of approximately 37.7m is finally beginning to look achievable. Lombardi went as far as giving a bill a “50-50 chance” to be passed later this year as an emergency measure, however other sources pointed towards 2014 as a far likelier target.
Any bill would have to go through the Senate Governmental Organisation Committee, chaired by Wright himself, whose bill is still the only one to actually be introduced in the state legislature.
Below eGR analyses the potential of each of the three California online poker bills, starting with the proposal which emerged this week..
The Internet Poker Consume Protection Act of 2013
The draft bill was sent to tribal leaders this week and is backed by eight tribes including Pechanga, Agua Caliente and Borona, and would allow tribes and card rooms to apply for a 10-year licence, but not racetracks.
The legislation has been crafted to ensure the majority of any revenues from online poker go to tribal groups first and foremost. It requires California to opt out of any future federal bill, as well as “internet gambling agreements between states or foreign jurisdictions”.
Moreover, in what seems to be a provision to prevent businesses outside California buying their way in to the market as an operator on the back of a tribe’s licence, “licensees must be able to pay upfront fees and establish [an] online poker business based on its own creditworthiness and assets”. In contrast, 888 plans to offer a B2C poker site in Nevada through Treasure Island’s licence, with funding from the All American Poker Network.
Although this would seem to price smaller tribes out of the market, the legislation calls for “reasonable fees” which are “not to exceed rationally based expected costs”. By way of comparison, Wright’s original legislation imposed a prohibitive $30m licence fee.
The legislation also calls for a ‘bad actor’ clause to block any operator that continued to operate in the States after the passage of UIGEA in 2006, and excludes racetracks from applying for a licence, while a go-live date of 1 January 2015 would be enforced.
Although Pechanga chairman Mark Macarro is in talks with state politicians to address the issue, the bill currently has no sponsor and no agreed licence fee or tax rate, making it very much a work in progress.
With eight tribes putting their name to the bill, it is the clearest sign yet they are ready to collaborate to help bring legalised online poker to California. This sentiment is expressed in the co-written cover letter, pointing out “reacting to proposals by the state and commercial interests was not the best way to arrive at a set of principles and policies”.
The tribes plan to meet in two weeks’ time to discuss the bill and any changes they wish to see.
Authorisation And Regulation Of Internet Poker And Consumer Protection Act Of 2013
Correa’s bill is also in draft form and is backed by San Manuel, one of the first tribes to quit COPA last year amid frustration at a lack of progress over online gambling regulation.
Few details have been released so far, except for the tax rate, set at 10% of gross gaming revenue. Similar to the Pechanga bill, the legislation would only allow tribes and card rooms to apply for a licence.
The bill is very similar to the Pechanga bill, with the key difference being that Correa outlines a three-tiered licencing process, depending on a licensed tribe’s level of involvement and gross gaming revenues.
Lombardi told eGR this bill and the Pechanga bill “could become one bill” at a later date because of their similarities, in a bid to gather more united support, with tribes set to meet this Friday to further discuss the bill’s specific provisions.
The Internet Gambling Consumer Protection And Public-Private Partnership Act of 2012
Due to opposition from tribes against the $30m licensing fee, eligibility of state racetracks and ADW firms, as well as the requirement to waive sovereignty during the licensing process, Wright took his bill off a Senate committee agenda.
However Lombardi said that following the two tribal draft bills, “Wright’s legislation will go nowhere, it won’t get out of committee”.